Australia's headline unemployment rate rose to 4.1 per cent in April, up 0.2 percentage points from March.
The number of people counted as officially unemployed increased by 30,300 last month, while the number of employed people increased by 38,500.
With employment and unemployment both rising, the participation rate rose by 0.1 percentage points, to 66.7 per cent, which is relatively high.
Bureau of Statistics data show the employment-to-population ratio remained steady at 64 per cent, indicating that recent employment growth is broadly keeping pace with population growth.
"This suggests that the labour market remains tight, though less tight than late 2022 and early 2023," said Bjorn Jarvis, ABS head of labour statistics.
"Unemployment" can grow at the same time as "employment" as more people join the labour force to officially look for work but they don't find work immediately.
Hours worked remained unchanged last month, despite the steady 38,500 increase in employment.
That's because more people took leave around Easter than they did last year, with work patterns aligning more broadly to pre-COVID times.
Economists say it's another sign labour markets are returning to more normal seasonal patterns, and becoming looser overall.
"The labour market is expected to slacken over 2024," said Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia.
"The economy is slowing, and forward indicators of labour demand are weakening," he said.
"Today's data are consistent with that easing being underway, although the data are likely to look stronger again next month as job attached workers flow into employment," he said.
The unemployment data comes a day after ABS figures showed the Wage Price Index rose at an annual pace of 4.1 per cent in the March quarter, down from 4.2 per cent in the December quarter.
Economists said the decline in the index suggested wages growth may have peaked in Australia, which could help the Reserve Bank of Australia (RBA) to control inflation.
Marcel Thieliant, from Capital Economics, said the continued rise in the unemployment rate last month further diminished the likelihood the RBA would deliver another interest rate hike.
He noted the under-utilisation rate jumped from 10.3 per cent to 10.7 per cent, in seasonally adjusted terms, and overall hours worked have actually declined by 15 million during the past 12 months, to be 0.8 per cent lower than this time last year.
"The RBA has argued that most of the adjustment in the labour market will come via falling working hours and a decline in job vacancies," he said.
"The bank will therefore be pleased that overall hours worked fell by 0.8 per cent year-on-year, the first annual decline since early 2021.
"Looking ahead, the labour market is set to loosen further as GDP growth is set to remain below trend.
"Indeed, job vacancies continue to fall and employment surveys point to employment rising by around 20,000 per month, well below the average 34,000 monthly rise in the labour force over the last six months.
"We expect the unemployment rate to rise to 5 per cent by 2026," he said.
Ben Neumann says with cost-of-living pressures biting, people are spending less on drinks and food at his bar, Ellora, in St Kilda, Melbourne.
He says revenue is down and he can't give staff as many hours as they want.
"People are going out a bit less, people are spending less, and they're not ordering as much," he told the ABC.
"It has limited the amount of shifts we have for casual staff … shifts might be a bit shorter, we might close early on a certain day, we might not be able to keep an extra one or two [staff] on that we otherwise might, or when people were out and spending more," he said.
Mr Neumann says in the immediate post-COVID era it was hard to find staff, but it was a different story today.
"I've never received as many resumes as we have at the moment," he said.
"I can see there's a lot of people out there looking for more part-time work and more work in the gig economy, and I see that perhaps there won't be anything in the near future in terms of being able to give people the amount of shifts they need."
He said to survive, his bar had been looking for new ways to raise revenue.
"We've had to be clever and valuate our (events) packages and value-add our offerings, so that we can bring more people in," he said.
According to the ABS, since October last year, full-time employment has increased by 56,608 people while part-time employment has increased by 104,299 people.
Westpac economists Ryan Wells and Pat Bustamante said the total number of hours worked had been softening over the last year, and that softness continued into April.
"Average number of hours worked have returned to pre-pandemic levels," they said.
"These dynamics suggest that the labour market went through a significant adjustment in the second half of 2023 and has now started to normalise."
However, they said the labour market was still, generally, in robust health, with signs of emerging slack "being gradual at best".
"The extent to which labour demand will continue to cool over the near-term will critically depend on the interplay between headcount and hours," they said.